Croda International Plc · LSE:CRDA

Croda International — FY2015 Earnings Presentation

32 slides from Croda International's earnings presentation, Feb 23, 2016

  1. Slide 1: Croda International Plc 2015 Full Year Results

    Croda International Plc 2015 Full Year Results 23 February 2016 Innovation you can build on™

  2. Slide 2: Cautionary statement

    Cautionary statement This review is intended to focus on matters which are relevant to the interests of shareholders in the Company. The purpose of the review is to assist shareholders in assessing the strategies adopted and performance delivered by the Company and the potential for those strategies

  3. Slide 3: Our Performance

    Our Performance Steve Foots – Group Chief Executive Innovation you can build on™

  4. Slide 4: 2015: Innovation driving continued growth

    2015: Innovation driving continued growth  Strong performance in a difficult environment  Record reported sales and pre-tax profit – sales growth in all sectors and regions  Performance driven by innovation  Continued progress in Personal Care and excellent growth in Life Sciences  Acquired Inc

  5. Slide 5: Consistent top and bottom line growth

    Consistent top and bottom line growth Continued sales growth Strong margin management Robust pre-tax profit growth 24.4% +3.7% +8.5% +70 bps Sales growth YOY* Return on sales/growth Profit growth YOY* *Underlying growth 5 Innovation you can build on™

  6. Slide 6: Broad based growth across all sectors

    Broad based growth across all sectors… Healthy sales growth ‘Classic’ Croda mix 10.5% 8.5% 3.7% 3.7% 3.4% 3.1% 1.8% 1.6% Sales value Profit* Sales volume Group Chemicals Technologies Personal Care Life Sciences Performance Industrial Underlying growth *Profit before tax 6 Innovation you can build on

  7. Slide 7: …and all regions

    …and all regions 60% of sales to markets outside Europe +1% +2% +6% Regional performance:  Strong growth continues in Asia – +5% now 20% of Group  Robust performance in North America  Return to growth in Western Europe EMEA North America Asia Pacific Latam  Largest customer –>2% Latin America sl

  8. Slide 8: Strong performance driven by innovation

    Strong performance driven by innovation NPP sales as % of Group sales  NPP sales up 15%  NPP sales growing at 4x underlying 26.1% sales  Growth across all sectors 23.4%  Bigger and better innovation being delivered each year 21.4% 20.5% Growth in Skin Actives Omega 3 API platform ‘IRB by Sederma

  9. Slide 9: Personal Care: Steady sales growth, strong profit improvement

    Personal Care: Steady sales growth, strong profit improvement Improved customer Profitable sales growth* Strong margin improvement proximity 7.5%  Asia and Europe strong performance 33.0%  Headwinds remain in Brazil  Stronger growth with 1.8% +120 bps regional and small customers  ‘Digitalisatio

  10. Slide 10: Life Sciences: Excellent performance driven by high purity technologies

    Life Sciences: Excellent performance driven by high purity technologies Exceptional result in Health; Profitable sales growth* Strong margin improvement Crop outperforming market 16.8%  High purity excipients - broad based growth 32.9%  High purity APIs - platform 10.5% established  Strong NPP le

  11. Slide 11: Performance Technologies: Geo Tech and investment outside Europe impact profit

    Performance Technologies: Geo Tech and investment outside Europe impact profit Broad-based sales growth* Margin reduction Making progress  Sales growth in all markets 1.6% -11.0% except Geo Technologies 16.0%  Geo Tech - 85% of sector profit fall; remains attractive -200 bps  Investing to grow ex

  12. Slide 12: Financial Performance

    Financial Performance Jez Maiden – Group Finance Director Innovation you can build on™

  13. Slide 13: Good sales growth and strong margin management driving profit

    Good sales growth and strong margin management driving profit 2015 Constant £m constant currency 2015 currency 2014 change % Sales 1,081.7 1,090.1 1,046.6 +4.2 Operating profit 264.2 265.3 248.4 +6.8 Net interest (9.5) (9.2) (13.0) +29.2 Pre-tax profit 254.7 256.1 235.4 +8.8 Tax rate 28.0% 28.0% EPS

  14. Slide 14: Consistent top line growth

    Consistent top line growth £m 5.2 1,090.1 (8.4) 38.3 1,081.7 1,046.6 2014 reported Underlying growth Acquisitions 2015 constant Currency 2015 reported currency translation  Underlying sales +3.7%: volume +3.1%, price +0.6%  Constant currency sales +4.2% - includes Incotec acquisition  Net currenc

  15. Slide 15: Strong bottom line growth

    Strong bottom line growth Return on sales 23.7% 24.4% £m 3.9 256.1 (1.4) 254.7 16.2 0.6 235.4 2014 reported Underlying Acquisitions Interest 2015 constant Currency 2015 reported growth currency translation  Underlying growth driven by NPP, cost efficiency and margin management  One month benefit f

  16. Slide 16: Consumer businesses driving profitable growth

    Consumer businesses driving profitable growth £m  Strong profitability in consumer facing businesses +20.7  Personal Care – NPP, skin actives & sun care  Life Sciences – broad based: +11.6 excipients and API platform +8.8  Investing in Performance Technologies +3.8  Encouraging growth outside o

  17. Slide 17: Strong cash generation continues, funding organic and acquisition investment

    Strong cash generation continues, funding organic and acquisition investment £m 2015 2014 EBITDA 302.3 285.1 Working capital (1.4) (12.3) Net capital investment (91.1) (64.5) Additional pension contributions (18.5) (30.2) Interest and tax (73.8) (57.9) Free cash flow 117.5 120.2 Dividends (90.9) (88

  18. Slide 18: We are investing in organic growth and innovation

    We are investing in organic growth and innovation £m Capital Investment  £91m net capital spend in 2015 includes c£30m for non-ionic 140 biosurfactant plant 120  Spend on this project should peak 100 in 2016 and complete in 2017 80  ‘Typical’ spend comprises asset Typical spend replacement and gr

  19. Slide 19: Capital Policy

    Excess capital is being returned Reinvest to Regular Disciplined Excess capital Capital Policy grow dividend approach to returned acquisitions 2x typical 40-50% EPS 1-1.5x net spend pay-out over Incotec debt:EBITDA cycle acquired Year-end leverage 0.8x Return of capital to mid-point of range - £136m

  20. Slide 20: Delivering our Strategy

    Delivering our Strategy Steve Foots – Group Chief Executive Innovation you can build on™

  21. Slide 21: Delivering consistency by relentless innovation and constant investment

    Delivering consistency by relentless innovation and constant investment Strategic priorities unchanged Clear investment focus  Delivering consistent top and bottom line growth  Bigger and better innovation  Accelerating innovation and increasing proportion of  Getting closer to our customers pro

  22. Slide 22: Winning with bigger and better innovation

    Winning with bigger and better innovation Investing in fast growth technologies Investing in more new products NPP sales value MajestemTM KerestoreTM CrodaThermTM  Skin actives and plant stem cells  High purity excipients Image  Sun care actives awaited  New pharma Omega 3 partnerships Skin lift

  23. Slide 23: Winning by getting closer to customers

    Winning by getting closer to customers Investing in customer collaboration Investing in new customers Customer projects Asia customers Greater formulation support Singapore - Fusionopolis 2012 2015 2012 2015 Investing in direct selling Investing in Indonesia Transforming from 7 Distributors 800 Cust

  24. Slide 24: Winning by disciplined and well targeted acquisitions

    Winning by disciplined and well targeted acquisitions Leading position in Crop market Formulation Seed biology know-how know-how About Incotec Seed enhancement Why Incotec?  Entrepreneurial  Fastest growing, high value  Ticks all our strategic boxes  Global business - €71m sales Crop niche  R&D

  25. Slide 25: Key take aways

    Key take aways 2015 – a year of strong strategic progress  Increased innovation  Enhanced customer intimacy  Almost £200m of targeted investment to drive future growth  Strong returns to shareholders: increased dividend and capital return Outlook  Market conditions remain challenging  Innovati

  26. Slide 26: Questions

    Questions Innovation you can build on™

  27. Slide 27: Full year revenue analysis

    Full year revenue analysis FY 2015 FY 2015 FY 2014 % Constant £m Reported Constant Reported versus 2014 currency Personal Care 377.3 375.8 369.1 1.8 Life Sciences 231.3 231.4 204.5 13.2 Performance 354.8 361.0 355.2 1.6 Technologies Industrial Chemicals 118.3 121.9 117.8 3.4 Group 1,081.7 1,090.1 1,

  28. Slide 28: Underlying sales growth

    Underlying sales growth % H1 2015 H2 2015 FY 2015 Personal Care 2.8 0.8 1.8 Life Sciences 14.7 6.4 10.5 Performance Technologies 3.3 (0.2) 1.6 Industrial Chemicals 2.5 4.6 3.4 Group 5.2 2.0 3.7 28 Innovation you can build on™

  29. Slide 29: Underlying sales growth

    Underlying sales growth % Q3 2015 Q4 2015 H2 2015 Personal Care 2.0 (0.4) 0.8 Life Sciences 7.3 5.5 6.4 Performance Technologies (1.1) 0.7 (0.2) Industrial Chemicals 5.3 3.5 4.6 Group 2.3 1.7 2.0 29 Innovation you can build on™

  30. Slide 30: H1/H2 sales analysis

    H1/H2 sales analysis £m H1 2015 H2 2015 FY 2015 Personal Care 197.1 180.2 377.3 Life Sciences 118.8 112.5 231.3 Performance 185.7 169.1 354.8 Technologies Industrial Chemicals 63.0 55.3 118.3 Group 564.6 517.1 1,081.7 Reported currency 30 Innovation you can build on™

  31. Slide 31: H1/H2 operating profit analysis

    H1/H2 operating profit analysis H1 2015 H2 2015 FY 2015 FY 2014 Operating profit (£m): Personal Care 64.4 60.1 124.5 117.3 Life Sciences 40.5 35.7 76.2 64.7 Performance Technologies 31.6 25.2 56.8 63.8 Industrial Chemicals 4.3 2.4 6.7 2.6 Group 140.8 123.4 264.2 248.4 Return on sales (%): Personal C

  32. Slide 32: Retirement benefit deficit (IAS19 basis)

    Retirement benefit deficit (IAS19 basis) £m at 31 December 2015 2014 Market value of assets 969.6 946.5 Value of liabilities (1,048.4) (1,073.2) Deficit pre tax (78.8) (126.7) Deferred tax 22.9 31.3 Deficit post tax (55.9) (95.4) 32 Innovation you can build on™

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